Southwest Initiative Foundation

The Southwest Initiative Foundation enhances the economic vitality of Southwest Minnesota by providing four specialized loan programs.

• The Direct Business Loan Fund helps central Minnesota companies create or retain quality jobs by filling gaps in business financing packages. Targeted industries include value-added agriculture, natural resource-based manufacturers, and industries utilizing technology in manufacturing processes. Loans range from $50,000 to $250,000.
• The Technology Capital Fund invests in two types of enterprises: entrepreneurs launching emerging technology ventures and established companies integrating proven productivity applications into their business operations. Investments range from $50,000 to $500,000.
• The Seed Capital Fund advances emerging entrepreneurial ventures by financing product concept, development and market research. In return for investments up to $50,000, the Initiative Foundation negotiates company equity or royalties that reflect the incurred risk.
• The Microenterprise Loan Guarantee Fund increases local ownership or expansion of small businesses — especially among underserved populations. It targets women, minorities, young adults and people with low net worth, but funds other applicants as well. The fund protects banks and lenders against loan default by underwriting up to $50,000 through a simple guarantee contract.

Miscellaneous Business Financing

The Business Development Loan Program participates in financing business expansions. The program focuses on site acquisition, building construction, and electrical costs. It is funded by ECE and its power supply cooperative, Great River Energy, in partnership with a lender of the customer’s choice. Financing is set at market rates, typically on 5-10 year terms. Loan limits are $200,000.

• USDA Business & Industry Loan Guarantee Program offers financing of $200,000 to $10 million for business expansion in rural communities. Terms are 0% to market rate. The program is funded by the USDA Rural Development and Rural Business-Cooperative Service in partnership with ECE.
• The Commercial Loan Program features variable or fixed interest rates of 1.5-2.5% over prime for terms or 7-15 years. The minimum loan amount is $10,000.
• Commercial Energy Efficiency Loans help business customers improve energy efficiency, conserve energy and reduce operating costs. The loans fund the installation of electrical equipment, including lighting retrofits, electrical heating and cooling equipment, motors/drives, air conditioners and refrigeration. Terms are 8% interest for up to 6 years.

SW Minnesota Regional Development Commission

The Community and Economic Development division of this public agency provides gap financing loans, seeks funding, provides land use planning and zoning assistance, develops housing studies, and coordinates several region-wide economic development initiatives.

• The Revolving Loan Fund provides gap financing to businesses locating or expanding in Isanti and neighboring counties. It covers building construction, conversion or enlargement; equipment; modernization costs; start-up operating costs; and working capital.

Minnesota Department of Employment and Economic Development

DEED sponsors several low-interest funding programs designed to create and retain high quality jobs.

• The Minnesota Investment Fund awards grants to local units of government which provide loans to expanding local industrial, manufacturing and technology-related industries. Loans of up to $500,000 may be used for land, buildings, infrastructure improvements, equipment or training.
• Small Business Development Loans create jobs and provide loans for business expansions. Loans are funded through the issuance of industrial development bonds backed by a state-funded reserve.

Small Business Development Center

The Southwest Minnesota SBDC fosters economic growth in the region by providing free or low-cost assistance to small businesses. Services include business counseling, training seminars, and resources — including a business information library, microcomputers, software and referral services.